Explain Sraffa’s critique of the Marshallian industry supply curve based on diminishing returns under the general case. note: for example when it says that the industry accounts for a very small share of the total quantity of the fixed factor
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Explain Sraffa’s critique of the Marshallian industry supply curve based on diminishing returns under the general case.
note: for example when it says that the industry accounts for a very small share of the total quantity of the fixed factor
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- “Cost functions can be very important for determining the structure of a market” Cost functions are fundamental tools in economics, revealing the relationship between a firm's total cost (TC) and important factors like fixed and variable production costs, output levels, and technological advancements. By analysing these cost functions, expressed mathematically as the relationship between TC and the quantity of output (Q), we gain valuable insights into how firms within a particular market structure make production and pricing decisions. This understanding is crucial for comprehending the dynamics and competitive landscape of different market structures. Make this more relevant to prompt and what you will be talking about Perfect competition is a market structure characterized by an infinite number of suppliers and consumers. In this ideal scenario, Everyone has all the information they need (perfect information), and the products themselves are identical (homogeneous) and there are no…a. Find the input demand (x), output supply (y), and profit function for the technology, y = ln(x), where y = 0 for x ≤ 1. b. Use Hotelling’s Lemma on the profit function in part (a) to find the input demand for x and the output supply for y.8 Question 8 = Suppose that a production function F(L, K) is homogeneous of degree 3, and that the long run output constrained factor demands at q = 1, w = 4, and r = 6 are K* (q = 1,w = 4, r = 6): 1 and L* (q= 1, w = 4, r = 6) = 2. Show that the long run cost function at w = 4 and r = 6 is equal to C(q, w = 4, r = 6) = q¾ (2 · 4 + 1 · 6) = 14q¾. (hint: solve for the cost of producing q = 1 first).
- Question 5. The Cobb-Douglas production firnction is widely used in economic and empirical analysis because it possesses several useful mathematical properties. The general form of the Cobb-Douglas production is given as: Q = AkaL where A is a positive constant and 0< a<1, 0Use second image for reference, for part b here is referene; The maximum profit is found at the tangency between the production function and the isoprofit line. In other words, the slope of the production function and the slope of the isoprofit line must be the same. This is written as MPL = w where w is the slope of the isoprofit line. Then we get sqrt1 / 2L = w => 1/2w = sqrtL => L*D = 1/4w^2Given the input-output matrix below, find the output matrix if final demand changes to 600 for water, 180 for electric power, and 700 for agriculture. Industry Electric Power Water 120 Agriculture Final Demand 240 320 160 Water 480 270 Electric Power Agriculture Other Industry: 60 120 170 400 180 240 240 360 80 The output matrix is X=. (Round to two decimal places as needed.)a) Find Bob the builder’s total cost function. Use the cost minimization conditions to find Bob the builder’s conditional demand for labor L^(q) and equipment K^(q). b) Substitute the conditional demand for labor and equipment and the current wage rate and rental cost of equipment in the expression TC = wL^(q) + rK^(q). c) Suppose Bob charges $4,000 for each veranda, how many verandas does he build? How many workers does he hire? How many pieces of equipment does he rent?A firm's technology is characterized by a Cobb - Douglas production function of the form 1 1 y = f(K,L) = 2K² + 1² a. The output price is p, and the input prices are r and w for K and L, respectively. Set up the problem for a profit - maximizing firm and solve for the factor demand functions for K and L. b. Find the firm's supply function. c. Find the firm's profit function. d. Assume now that p = 2, r = 1, and w = 1. Using the functions you have found in parts (a), (b) and (c), calculate the profit - maximizing levels of the factors and (K* and L*), the profit - maximizing output level (v) and the maximum profit of the firm (). Please solve it by explaining and explaining.Consider a competitive firm with a profit function: T=R -C=PQ- wL-rK P=price Q=quantity %3D L= labor K = capital w, r= input prices for Labor and capital if Q function is a Cobb Douglas production functions: Q = L"KP where: a=B< 1/2 a. what is the profit max equation? b. what are the values of K, L and Q? c. verify the second-order conditionExplain how the following events may affect the profit rate for a U.S. firm and industry (be sure to define your measure(s) of the profit rate) :Consider both the immediate impact and the possible long run implications: (1) across firms within an industry; (2) across industries and (3) across nations please long and mindful answers that covers all three categories. a) Oil price increases b) Election of a union-backed government c) Outsourcing of clerical work to India d) Introducing a better assembly line1/3 1/3 Bridget's Widgets produces widgets with the production function, y = x1 x2, where 1 is the quantity of labor input, x2 is the quantity of capital input, and y is the quantity of output. The per-unit price of labor input is w₁ = 20 and the per-unit price of capital input is w₂ = 80. What is Bridget's long run total cost function, C(y), given that both inputs can be varied in the long run? C(y) 20/2 C(y)-80y/ C(y)-80y = ⚫ C(y)=20y³a) Explain what is meant by the terms marginal cost and sunk cost in production theory, and give some examples that can illustrate the concepts.Explain whether these terms are important for a profit-maximizing company that sells a finished item in a market with a fixed market price. b) Production in a business can be described by the product function y = f(v), where y is the number of units produced of the item, and v is the number of units of the input factor. The company can purchase the input factor at a fixed price per unit and has no fixed costs.Suppose that production is characterized by declining scale yield. Explain what it means and what in such a case can be said about the marginal costs enterprise.Use charts to illustrate the scale yield and marginal costs in this case.Pay the close attention to the axis denominations.SEE MORE QUESTIONS